Oil prices rise on China growth, Middle East tensions

Oil prices experienced a rise on Tuesday, buoyed by stronger-than-expected economic growth in China and escalating tensions in the Middle East following Iran’s recent missile and drone attack on Israel.

Brent futures for June delivery advanced by 20 cents, or 0.2%, reaching $90.30 a barrel, while U.S. crude futures for May delivery increased by 21 cents, or 0.3%, reaching $85.62 a barrel by 0757 GMT. The initial increase in oil prices was fueled by China’s release of official data indicating a 5.3% year-on-year growth in gross domestic product for the first quarter, surpassing analysts’ forecasts.

However, gains were tempered as additional Chinese economic indicators, including real estate investment, retail sales, and industrial output, pointed to ongoing weakness in demand amidst a prolonged property crisis.

Oil prices had surged last week to their highest levels since October but retreated on Monday following Iran’s attack on Israel, which ultimately inflicted less damage than initially feared, alleviating concerns of a rapid escalation in conflict that could disrupt crude supplies.

The trajectory of the situation hinges on Israel’s response, with the potential for the conflict to either be contained or escalate further, possibly involving the United States, according to analysts at ANZ Research.

Israeli Prime Minister Benjamin Netanyahu convened his war cabinet for the second time in less than 24 hours to deliberate on how to address Iran’s unprecedented direct attack on Israel.

Iran, a key member of the Organization of the Petroleum Exporting Countries (OPEC), produces over 3 million barrels of crude oil per day, making it a significant player in global oil markets.